Terms Of NIT Must Be Clear & Unambiguous: Supreme Court Directs Reconsideration Of Bidder’s Technical Bid

The Appellant approached the Apex Court challenging the judgment of the Division Bench of the Allahabad High Court refusing to set aside the decision of the first respondent, Krishi Utpadan Mandi Parishad, rejecting the appellant’s technical bid on the ground that the ‘haisiyat praman patra’ submitted by it had not been issued by the District Magistrate.

The Division Bench of Justice Surya Kant and Justice Joymalya Bagchi reaffirmed, “It is trite that the terms of an NIT must be clear and unambiguous. If 1st respondent-Mandi Parishad intended that ‘haisiyat praman patra’ must be issued by District Magistrate alone, it ought to have specified so in the NIT conditions.”

“Given the situation, it was incumbent on 1st respondent-Mandi Parishad to indicate in the tender conditions that the ‘haisiyat praman patra’ was to be obtained from a District Magistrate as per the procedure laid down in such government notification. Having failed to do so, the 1st respondent-Mandi Parishad could not have rejected the certificate submitted by appellant on the ground that it was not issued by a District Magistrate. That apart, appellant’s certificate has been issued by an experienced valuer registered with the Income Tax Department who is otherwise competent to issue such certificate”, it added.

AOR Shail Kumar Dwivedi represented the Appellant, while AOR E. C. Agrawala represented the Respondent.

Factual Background

The dispute in the instant matter revolved around a tender floated by the respondent-Mandi Parishad, to let out a banquet hall/terrace lawn for 10 years to the highest bidder. The notice inviting tender prescribed a two-stage bidding process comprising a technical bid and a financial bid. Clause 18 in the NIT stated that the bidder must submit a ‘haisiyat praman patra’ of minimum ₹10 crore with the technical bid. The Appellant, as well as the successful bidder (fifth respondent), submitted their respective bids. Appellant’s technical bid was disqualified for the reason that the ‘haisiyat praman patra’ was issued by a private architect and not a District Magistrate.

Claiming itself to be the highest bidder and that the technical bid had been unlawfully rejected, the appellant approached the High Court by way of a writ petition. The same was dismissed, and it was held that the valuation certificate issued by a private architect could not be treated as a ‘haisiyat praman patra’, i.e., solvency certificate as the same is always issued by the office of District Magistrate. The appellant’s SLP was disposed of with a direction that if the successful tenderer had not started the execution of the tender, no further work be done in pursuance of the tender, and in case it had so started, it would be subject to the final orders to be passed by the Court.

Reasoning

The Bench explained that in tender matters, the court exercising judicial review does not sit in appeal over the decision of a tendering authority regarding the disqualification of a bid. Only in cases where such a decision is dehors the terms of the NIT or is patently arbitrary would the Court exercise powers of judicial review and set aside such a decision.

On a perusal of the NIT, the Bench noted that neither Clause 18 nor any other condition specified that the ‘haisiyat praman patra’ submitted by a prospective bidder must be issued only by a District Magistrate in terms of the government notification. The Bench asserted, “Given these circumstances, we are loathe to permit the 1st respondent-Mandi Parishad to justify the rejection of appellant’s technical bid on such additional ground belatedly taken in the counter affidavit. There is no cavil that an order of rejection must be sustained on grounds stated therein and additional grounds cannot be subsequently pressed into service to justify such rejection.”

The Bench took note of the fact that the valuation certificate showed the worth of the appellant’s share in the asset far exceeded ₹10 crore as required under Clause 18 of the NIT. As per the Bench, if the Parishad doubted that the asset was encumbered it ought to have sought clarification from the appellant on such score before rejecting the bid.

“For the aforementioned reasons, we are of the opinion that rejection of appellant’s technical bid on ground that appellant’s certificate was not issued by District Magistrate is dehors the terms of the NIT and is liable to be quashed”, it held.

The Bench disposed of the Petition by remanding the matter to the Parishad to reconsider the technical bid of the appellant. “...if it is satisfied that the net worth of the asset (free of encumbrances, if any) disclosed in the valuation certificate submitted by appellant meets the requirement of Clause 18 of the NIT, it shall accept the technical bid and after due negotiations between appellant and the 5th respondent (successful bidder), of contract be awarded to the appellant or in the event 5th respondent matches the financial bid or enhanced offer of the appellant, permit the 5th respondent to continue the contract for the remaining period”, it ordered.

Cause Title: Kimberley Club Pvt. Ltd. v. Krishi Utpadan Mandi Parishad (Neutral Citation: 2025 INSC 1276)

Appearance

Appellant: AOR Shail Kumar Dwivedi, Advocate Siddharth Krishna Dwivedi

Respondent: Senior Advocate Sukumar Pattajoshi, AOR E. C. Agrawala, Advocates Sunil Murarka, Anshuman Srivastava, Panka Agarwal, Kamakshi Sahgal, J.N.S. Tyagi, Somesh Kumar Dubey, Rakesh Kumar Singh, Sushant Kumar Mallik, Pradeep Yadav, Himanshu Yadav, AOR Durga Dutt

Click here to read/download Judgment